EU Proposed Legislative Package - Modernization of the EU Copyright Rules

On September 14, the European Commission published a package of legislative proposals (see Press Release) to update and reform the EU rules related to copyright in an effort to advance the “Digital Single Market” strategy that was adopted in May 2015. In general, the proposals are aimed at promoting online access to content throughout the EU.
 
Specifically, in the audiovisual arena, the Commission has proposed: a Regulation laying down rules on the licensing of certain online transmissions of broadcasting organizations and expanding collective management of retransmissions of television and radio programs; and a Directive on copyright in the Digital Single Market.
 
The Commission has stated that later this autumn, it will publish additional proposals to improve enforcement of all types of intellectual property rights, including copyright.
 
Inspired by the 1993 Satellite and Cable Directive (93/83/EEC), the proposed Regulation attempts to address purported difficulties related to the clearance of copyright in two ways: (1) by establishing that the rights for certain online services of broadcasters (for instance, online simulcasting or catch-up) need to be cleared only for the broadcaster’s country of principal establishment (known as the “country of origin” principle); and (2) by extending the system of compulsory collective management currently applicable to cable retransmissions to other digital retransmissions.
 
The proposed Regulation seeks to broaden online access to television and radio programs across borders by proposing a legal mechanism for broadcasters to obtain more easily the authorizations they need from right holders to transmit programs online into other EU Member States. However, in doing so, the proposed Regulation fails to ‘respect the value of rights in the audiovisual sector' as it permits territoriality without protecting full exclusivity: offering less than full exclusivity will generate less income with a negative impact both on raising financing and on recoupment. While the proposed Regulation would permit right holders to opt out by contract, they are unlikely to have sufficient negotiating leverage against the broadcasters to exercise that right.
 
The proposal for a Directive on Copyright in the Digital Single Market aims to reinforce the position of right holders to negotiate and be remunerated for the online exploitation of their content on video-sharing platforms. Such platforms will have an obligation to deploy effective means such as technology to automatically detect audiovisual works which right holders have identified and agreed with the platforms either to authorize or remove.
 
With respect to the so-called “value gap” - under which producers and/or online platforms generate (but do not share) revenue from distributing content - and possible disparities in authors’ and performers’ remuneration from online distribution of content, the proposed Directive obliges publishers and producers to be transparent and inform authors or performers about profits they made with their works. It also sets out a mechanism for authors and performers to seek to rebalance contracts where the agreed remuneration turns out to be disproportionately low compared to the revenues generated by the work. 
 
The proposed Directive also seeks to expand the scope of the “exceptions and limitations” to copyright protection while accomplishing further harmonization among the Member States.  For example, it sets out new rules to require all Member States to introduce a mandatory exception or limitation in their national laws to allow educational establishments to use materials to illustrate teaching through digital tools and in online courses across borders and to allow cultural heritage institutions to preserve works digitally. The proposed Directive also seeks to make it easier for researchers across the EU to use text and data mining technologies to analyze large sets of data. Of some concern may be provisions suggesting new mechanisms to facilitate licensing of “out of commerce works”; the full scope of this proposal is not yet fully understood.
 
In addition to the above, the Commission has proposed a Directive and Regulation to implement the World Intellectual Property Organization’s 2013 Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled.  The proposed Directive establishes a mandatory exception allowing people who are blind, have other visual impairments or are otherwise print disabled to access books and other content in formats that are accessible to them and the proposal for a Regulation will permit the cross-border exchange of such copies between the EU and third countries that are parties to the Marrakesh Treaty. 
 
These latest legislative proposals follow the proposed Regulation on cross-border portability of legal online content subscriptions (December 2015) to allow EU residents to access the digital content they have purchased or subscribed to at home while traveling within the EU, and the proposed revised Audiovisual Media and Services Directive (May 2016) both pending adoption at this time.
 
What Happens Next?
 
The legislative proposals will be sent to the European Parliament and to the Council (i.e., the EU Member States) for review, amendment and adoption. The Directives must then be implemented by each Member State through local legislation, whereas the Regulations will become immediately binding on the Member States following their effective dates.
 
As IFTA reviews these draft legislative proposals to ascertain their potential impact on the independent film and television industry, we remain actively engaged with the Commission and the Member States to preserve the integrity of territorial exclusivity in the audiovisual sector and maintain the indispensable market incentives for the film, TV and sports industries to finance, produce and distribute audiovisual content in Europe.